Tribunal upholds penalties on company under Central Excise Act, Director's penalty set aside. Revenue's appeal rejected.

The Tribunal partially upheld the penalties imposed on the appellant company under Section 11AC of the Central Excise Act, 1944, citing non-disclosure of relevant facts during clearance. The personal penalty on the Director was set aside due to lack of evidence of his specific role in non-payment of duty. The reduction in demand based on trading sales did not absolve the appellant of removal of goods without payment of duty. The Revenue's appeal challenging the benefit of discharging 25% of the penalty was rejected, following a precedent set by the Hon'ble Gujarat High Court.

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Issues:
- Imposition of penalty under Section 11AC of Central Excise Act, 1944 on the appellant company and personal penalty on the Director.
- Reduction of demand based on trading sales.
- Allegation of removal of goods without payment of duty.
- Justification of penalty and demand.
- Personal penalty on the Director.
- Appeal by the Revenue challenging the benefit of discharging 25% of the penalty.

Imposition of Penalty:
The appeals challenge the imposition of penalty under Section 11AC of Central Excise Act, 1944 on the appellant company and personal penalty on the Director. The appellant contends that the goods were cleared at NIL rate of duty under a bonafide belief, and the demand was reduced after extending benefits and deducting trading sales. The Revenue argues that suppression led to the penalty imposition, as the proper use of machinery was not disclosed. The Tribunal found the reduction in demand significant but upheld the penalty on the appellant company, citing non-disclosure of relevant facts during clearance. However, the personal penalty on the Director was set aside due to lack of evidence of his specific role in non-payment of duty.

Reduction of Demand Based on Trading Sales:
The demand was initially high but reduced significantly to &8377; 3,92,051 after considering trading sales and extending benefits. The reduction in liability did not absolve the appellant of removal of goods without payment of duty, as necessary facts were not disclosed during clearance. The Tribunal upheld the reduction but maintained the charge of removal without duty payment due to incomplete disclosure during the clearance process.

Allegation of Removal of Goods Without Payment of Duty:
The appellant allegedly removed Ginning Machineries at NIL rate of duty for non-agricultural purposes, leading to duty confirmation. The major sales turnover was attributed to trading activity, resulting in a reduced liability after deducting trading sales. The Tribunal found the appellant liable for removal without duty payment due to incomplete disclosure during the clearance process, even after the reduction in demand.

Justification of Penalty and Demand:
The Ld. Commissioner (Appeals) justified the demand and penalty imposition under Section 11AC of the Central Excise Act, 1944 on the appellant company. The Tribunal upheld this decision, stating that the reduction in liability did not negate the charge of removal without duty payment due to incomplete disclosure during clearance.

Personal Penalty on the Director:
The personal penalty on the Director was set aside by the Tribunal due to the lack of specific evidence showing his active role in non-payment of duty. The infighting between directors hindered the disclosure of all facts related to export and trading sales, leading to the personal penalty being deemed unwarranted and subsequently set aside.

Revenue's Appeal:
The Revenue's appeal challenging the benefit of discharging 25% of the penalty imposed under Section 11AC of the Central Excise Act, 1944 was rejected. The Tribunal upheld the benefit extended by the Ld. Commissioner (Appeals) to the appellant, citing a precedent set by the Hon'ble Gujarat High Court.

In conclusion, the appeals challenging the penalties imposed on the appellant company and the Director were partially upheld and set aside, respectively. The reduction in demand based on trading sales did not absolve the appellant of the charge of removal without payment of duty. The Tribunal upheld the penalty on the appellant company but set aside the personal penalty on the Director. The Revenue's appeal regarding the benefit of discharging 25% of the penalty was rejected, following a precedent established by the Hon'ble Gujarat High Court.

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